Author: Thomas Vargas

When it comes to identifying actors in international development, we point to the World Bank, the Millennium Challenge Corporation, Bono, and even Transparency International. Whether they’re heroes or villains is a decision for development wonks. The point is, however, that we don’t generally think of big private corporations like Cargill; they don’t usually play a role in development, right?

Wrong.

Some of them actually make quite hefty contributions to development initiatives. The problem, a skeptic would tell you, is that they’re probably not doing it for the right reasons; they may be doing it for publicity, thereby (theoretically) increasing their profits and building their brand.

In some instances, the skeptic might be right. And this may have to do with the fact that sometimes for-profit ventures and development initiatives don’t have much in common.

Recent experience, however, has shown that there are times when profits and development activities can go hand-in-hand, meeting in the hearty middle and creating (buzzword alert) shared-value. The concept is simple enough: when you train farmers in best practices, they can increase their yields. Higher yields will result in more compensation for the farmer. This initiates the sort of multiplier effect that can transform entire communities. It’s called creating shared-value because both sides have a stake in maintaining a sustainable and fair economic relationship.

Of course, the job isn’t as simple as it seems. Part of it is that dumping money into a community doesn’t necessarily transform it for the better. Development requires, among other things, institutions, a dose of financial education, and adequate health services. To overcome these issues, private-nonprofit partnerships can be of tremendous help.

Development nonprofits often possess the know-how to tackle education, health, and institution-building programs. When they enter into agreements with for-profit corporations to help a community, they create a triangle of shared-value, drawn to the left. What this figure shows is that under this scheme nonprofits provide services to both the corporation, by mobilizing its assets to help with the management of development projects, and the community, by providing some of these services. Presumably, the nonprofit receives money in exchange for some of these services and gain utility from helping an impoverished community.

To provide a specific example of this relationship we turn, once more, to Cargill. In its work in Africa and elsewhere, Cargill has partnered up CARE. In Brazil, for instance, the partnership is responsible for helping cocoa growers diversify their income to protect them against economic downturns. In their activities across the world, CARE and Cargill have tackled a number of other significant issues, including nutrition, sanitation, and education programs.

This sort of behavior has created an interesting shift in how corporations approach development. Traditional corporate social responsibility models are being replaced with more hands-on initiatives, the sort that benefit everybody involved. It has also transformed the way nonprofits relate to donors. CARE, for example, is less interested in partner corporations willing only to write a check. Today, they seek partners interested in real engagement.

Whether these attitudes will change across the spectrum of nonprofit and private corporations involved in development is difficult to assess. What we do know, from the CARE -Cargill experience, is that there is the possibility to do some good. The challenge is to determine whether or not Cargill-CARE’s success is replicable. Intuition suggests that replication should be possible. To discover whether it is, governments, nonprofits, and corporations should challenge themselves to establish these shared-value triangles. If corporations are committed to these ventures, and success becomes the norm, these types of partnerships may very well be on solid ground and ready for public vetting.

Moving forward, however, we should be ready to accept the possibility that the incentives that brought CARE and Cargill together may be unique to their situation. That is to say, it is possible that similar ventures could fail. The key take-away, then, is rather nuanced: corporation and nonprofit joint initiatives have been shown to be productive, but this might not always be the case.

Although Tripoli fell to NATO-backed rebel forces in less than 200 days, many have warned that development activities in the post-conflict reconstruction period will last for many years. This agreement has provided an opportunity for scholars and practitioners alike. In the months since the beginning of the civil war, the intellectual community has attempted to draw actionable plans for a post-Gadhafi Libya. The number of panels convened is impressive.

To make a modern state out of Libya, transition leaders have to hold the nation together, without the coercive use of force.Vandewalle insists that traditional tribal identities will make this difficult.

In this regard, some have suggested that pushing for wholesale democratic reforms today may precipitate the undoing of the Libyan republic, particularly in light of a foreseeable struggle for national authority. As Soumaya Ghannoushi of The Guardian reports: “The vacuum created by Gaddafi’s departure is now filled by two polarized camps”: the National Transitional Council on one side (NTC) and the political and military leaders that liberated cities across Libya on the other. Until the power struggle between these two factions is resolved, it is unlikely that a sustainable path to development can be achieved. Furthermore, it would be unwise to liberate Libya’s frozen funds to any side without having solved the political question first.

Once these issues have been squared, controversy will move to spending (how and how much to spend). According to Reuters, Libya’s sovereign wealth fund holds around $70 billion in assets. Legitimate transition authorities will inevitably have to tap into these funds to bring Libya up to its economic capacity. To do so, they must seek guidance from both friendly governments and the private sector. In this, the opportunities are limitless.

However, before all of the complexities associated with economic development are analyzed, Libyans must decide for themselves how to organize politically. How long this will take, or the end result of said process is, however, unknown. Thus making this a critical juncture in Libya history.

The words “international development” often conjure images of hard working nonprofit volunteers stranded in the middle of Sub-Saharan Africa. Their selflessness and dedication in the face of adversity makes the rest of us seem frivolous. But there are other actors, some less selfless than our imagery of volunteers, which are part of the development community. Increasingly, large private organizations (the size of Wal-Mart) are playing a role in international development efforts. Understandably, the activities of corporations in developing regions are usually fraught with suspicion: aren’t they doing it only for the publicity? Paying close attention to the work of Cargill, a large American corporation, and their partnership with CARE, the international nonprofit, reveals that long term and thoughtfully planned commitments can, on occasion, create opportunities for individuals in the developing world while they tangibly contribute to large corporations themselves.

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The Center for Global Prosperity is focused on educating policy leaders and the general public on the crucial role of the private sector (both non and for profit) as a source of economic growth and prosperity around the world. To accomplish this central mission, the Center produces The Index of Global Philanthropy and Remittances, which identifies the sources and amounts of private giving around the world and The Index of Philanthropic Freedom, which identifies the barriers and incentives to private giving in 64 countries.